Legislators want hearings on health insurance rate hikes

Following controversy over a large rate increase sought by a health insurer last summer, a group of state officials is pushing for a new law requiring greater scrutiny of such changes--with opposition from both the industry and the commissioner in charge of regulating it.

The bill before the legislature's Insurance and Real Estate Committee would require public hearings to review every increase and make public the supporting evidence justifying a price increase.

"Scrutiny will bring downward pressure on health care prices," said Rep. Steve Fontana, D-North Haven, co-chairman of the committee.

Supporters of the measure--including both committee co-chairmen, Attorney General Richard Blumenthal and the state's Health Care Advocate Kevin Lembo--point to a request last year by Anthem Health Plans Inc. for a 23.5 percent increase in premiums for individual policies as evidence of the need for a more rigorous approval process.

After legislators and other officials raised objections to the increase, the state Insurance Department approved a reduced increase of 16.5 percent.

But Fontana said insurance companies too often get the rate hikes they ask for, citing a legislative report outlining the state's five largest insurance companies receiving nearly every increase they asked for in the past four years.

In addition to requiring hearings, the proposed bill also would give the attorney general's and the state's health care advocate authority to appeal the insurance commissioner's rate decisions in court.

A public hearing is scheduled on the bill for Thursday.

"The state has no ability to review the concerns about affordability," said Sen. Joeseph J. Crisco, Jr., D-Woodbridge, co-chairman of the Insurance Committee.

But Insurance Commissioner Thomas R. Sullivan said rate decisions should be based on actuarial data, not subjective opinions about affordability.

"Could you please define for me what is considered affordable? What is affordable to you may be different from what is affordable to a company," he said.

Sullivan said he supports requiring more information being made public, but believes the current system is working.

"I rejected the Anthem increase. Isn't that proof that it is working?" he said.

Explaining why so many of the proposals from previous years were approved, he said, is because "insurance companies know better than to submit exorbitant increases."

But Lembo doesn't accept that reasoning.

"There will always be the need to dig deeper," he said, pointing to insurance companies record profits. "It certainly sounds like a rationalization for history."

Keith Stover, a lobbyist who represents the Connecticut Association of Health Plans, said this proposal is just another example of the fundamental disconnect in the legislature.

"They think when they attack premiums they are attacking costs," he said. "It's not like insurance companies are sitting there asking, 'how can we increase prices today?' You think they want to strip people of their ability to pay?"

With the future of the health reform uncertain, Stover said the health insurance industry finds itself with little relief in sight to contain rising health-care costs so double-digit premium increases could be inevitable.

A report released last week by the U.S. Department of Health and Human Services cited predictions that rates will increase 20, 25 and 30 percent nationwide and "most states don't have the legal authority to block or reduce health insurance rate increases."

Lembo argues that there is no harm in bringing to light what goes into making these rate increase decisions.

"Whether this information is actually going to drive the decision, we leave that to the Department. But there are customers and insurance companies and regulators affected by this and all three need to be heard," he said.

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